Tuesday, 29 November, 2022

World Bank: Economic distortions derail Pakistan’s growth

  • Sun Online Desk
  • 25th October, 2022 05:22:48 PM
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World Bank: Economic distortions derail Pakistan’s growth

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The World Bank says economic distortions hold back the economic growth of Pakistan … writes Dr Sakariya Kareem. The World Bank report identified many distortions in Pak growth model, either introduced by policy decisions, or ignored by it. It stated that distortions in various taxes, subsidies, size dependent industrial policies, trade restrictions or gender norms are leading to resource allocation that are suboptimal and which is discouraging innovation and productivity in the country

Former Finance Minister Miftah Ismail while speaking at Habib University stated that Pakistan’s economy suffers from three fundamental problems, i.e. living beyond its own means, focusing on import substitution instead of export growth and granting ‘elite bargain’, under which essentially 99% of the population continues to work for the privileged ones.

He also lamented the rent-seeking attitude of businessmen calling them ‘intolerant as hell’ and ‘belligerently uneducated’ as the elite capture resources and not heeding for any reforms. The former Minister does not see an optimistic economic outlook, even in the longer term under the existing circumstances.  He just articulated the same apprehensions as World Bank pointed out in a recent report.

The World Bank’s Country Economic Memorandum on Pakistan titled, ‘From Swimming in Sand to High and Sustainable Growth’, has reiterated the precarious conditions due to such distortions that are holding back the Pak economy’s growth. Pakistan’s development partners also pointed out at these fundamental rigidities as responsible for the poor prospects of the Pak economy in near future.

Source: Asian Lite